In today’s episode, Rebecca from Los Angeles ask how the Presidential Election will affect the overall economy and if it is a good time to purchase a second home?
With the 2016 election being such a buzzfeed right now. Everyone is talking about what affect the election will have on the US economy and the real estate market.
Yet, in reality if you look at the bigger picture it’s more about the trend of consumer confidence than it is the election. This correlation always seems to have a cause and effect on the overall economy and real estate.
Due to the uncertainty associated with election years. However, the bigger picture suggests if consumer confidence is up; prices and spending are up… Right?
I believe it’s just a question of connecting the dots. Presidential elections, like most elections, simply mirror the undertone of the US economy and ultimately the mood of voters or today’s consumers. So whatever the perspective mood in the economy is, upbeat or down is actually how things are perceived in the real estate market as well
Another thing to keep in mind, while connecting the dots is It’s important to remember that consumer spending accounts for 2/3 of the US economic activity, so this is an important indicator to keep an eye on for consumer confidence and trends.
In a kick ass economy, voters tend to be optimistic and confident which stimulates increased confidence and consumer spending along with a momentum in the rise of real estate prices. That euphoric state of Homeowners…along with wanna- be homeowners tend to enter the real estate market with FOMO on the owning the American dream. Rather than using fundamentals.
It is important too to remember that in a down economy described by low consumer confidence, low economic growth, and high unemployment. Everything starts to plummet and create downward pressure on consumer spending and affordability
As well as the overall housing sector. Less spendable dollars for everybody brings everything to a halt
And when that happens there is no political party that can stop that train. The only cure for that is job creation
Remember a roadmap to wealth is paved way beyond an election year.
I would also keep an eye on the latest consumer confidence reports for clues, here is a link for review.
https://www.conference-board.org/data/consumerconfidence.cfm
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Cheers
Rick Gee
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